i see your point. but if you say that the ex-factory price of the QQ is $5,500
Base QQ retails for $3,600 in China, meaning the ex-factory price is lower, but not by much since Chery's average margin on QQ is $50 per car. You bet Chery is losing money on the $3,600 base model.
then shouldn't the actual cost to produce be somewhere around $4,000?
$5,500 is the maximum Chery could charge for base Hornet since an overhead of $500 China inland transport(Wuhu is a fucked up place to export cars since it is not located beachside like all export oriented Japanese and Korean auto factories), $1,000 seafreight, $175 import duty, warranty, and the US dealer margin of $500 per car. Note that I am not counting in Chrysler's profit since Chrysler would lure possible customers with the $8,000 MSRP but sell them $10,000+ loaded versions instead. The US inland freight is extra.
Think about it, how are you supposed to build a US regulation compliant car for $5,500 anywhere on earth, even in China? Toyota and Hyundai's next generation low-cost cars aimed at developing markets are priced at $8,000, and these models aren't even US regulation compliant.
W/ this figure, chery wouldn't be making very much, but so long as the product gains acceptance, the eventual msrp could be raised slowly w/ face lifts, more options, etc. to raise the margins.
Then there is no point of Hornet since it would approach the price of Japanese and Korean subcompacts in the US.
since we're talking costs here, do you have an idea as to what a chinese manufacturer would consider as a fair net profit margin for every vehicle they produce?
5% is a fair margin to auto-manufacturers, foreigners and Chinese alike. But it has become increasingly difficult to turn a profit in China because of ongoing price wars. As one observer notes, China is the only place on earth where the car price goes down each model year instead of going up.